Imagine living in a country where you have access to almost all things. You have access to the financial system such as having a bank account.

You have the right to conduct a business that has a disruptive revenue model. Having the freedom to experiment ideas that will contribute to the real growth of the economy?

On the other hand, imagine you are in a country that lacks many things. The country has an undeveloped financial system, there is a problem of financial inclusion.

70% of the population is unbanked. Do you think you will be able to thrive in such a country?

To solve the problem of economic development is to address the financial inclusion problem. This is the story of a country called El Slavador, it has a huge problem of financial inclusion.

30% of the population are banked and 70% of the country is unbanked. According to a speaker at the Bitcoin 2021 conference held in Miami, 20% of the GDP of this country is from remittance sources, and 50% of the remittance goes into fee servicing.

But, they want to become like other countries that don’t have financial inclusion problems. 

In the Bitcoin conference, the president announced that Bitcoin will be made a legal tender. This is because with bitcoin the problem of financial inclusion, high rate of remittance, inflation due to the devaluation of currency will be solved.

But, what are the gains or the impact of making bitcoin and other cryptocurrencies legal tender?

Ways Cryptocurrency Adoption can Speed Up Economic Development.

While El Slavador became the first futuristic country that believed that a country can solve its economic development problems by embracing technology, the problem the country is experiencing is very similar to other developing countries and emerging economies.

When it comes to inflation, it is a global problem that every nation should fix. Imagine an open and trustless monetary system, where currency supply is fixed, will there be inflation?

The potential of bitcoin can help countries to solve the following problems and more. 

Financial Inclusion Effect:

Imagine what will happen to a country that has most of its population unbanked adopting cryptocurrency as a legal tender. When it comes to cryptocurrency, you don’t need a bank account to be part of the financial system, all you need is access to the internet. 

With access to the internet and software applications, you will be able to use bitcoins and other coins.

This will give freedom to the people and security. The poor and crude standard of living will be gone. What does financial inclusion bring to an economy?

Financial inclusions bring an increase in economic activities to an economy, this will translate to growth in GDP. Do the economies of Africa need this solution? Your answer is the same as mine…

 Economic Growth Effect:

According to a UN report, remittance to Africa has a 10% average fee rate. That means for every $1b remittance inflow would decrease by $1m.

This is a loss to the economy, and it will have a ripple effect on the economy. Imagine, a country like El Slavador that pays 50% of the remittance on the fee. That means the remittance to the economy is reduced by ½ due to the high rate of sending fiat money.

What crypto such as bitcoin does is that it makes cross border payment less expensive and efficient. What will take 10% can now be less than 2% .  A transaction that is supposed to take 3 days will now take minutes.

This gain in efficiency will generate gain in productivity which will lead to economic growth? Do Africa and Asian countries need this life-changing innovation? 

Technological Innovation Effect:

One of the direct impacts of the adoption of crypto, especially bitcoin as legal tender by a country, is the increase in technological innovation. A country that is friendly to blockchain and crypto innovation will surely attract the best tech brains. 

This will become a network effect that will lead the country to become a pioneer in that industry.   I can imagine the level of innovation that will be coming from El Slavador, because many tech talents will be opening offices there. 

What will this have on the economy of El Slavador? 

Entrepreneurship Explosive Effect:

Joseph Schumpeter, a legendary economist believed that the engine of economic growth is innovation. When innovation is added to entrepreneurship, it will create real growth to the economy. 

The government of El Slavdor had a foreign policy to offer a permanent citizenship to cryptopreneurs with a requirement of having 3 BTC.

When the effect fully matures, the economy will reap the benefits of reduction of unemployment, growth in productivity and economic activities, reduction in crime etc. When people have what to do, there will be less idle time to get involved in crime and social vices.

Can you see that to solve the problem of economic development technology is the sure solution?

However, making bitcoin a legal tender will be a great stride by countries as the benefits are too great but implementing policies to maximize the benefits are far more important. What policies will your country adopt to maximize or optimize the benefits of making crypto a legal tender?.

Here is an article that explains how to use ERC20 USDT and TRC20 USDT. 

Originally published on Trenndify 

Good People, join me to welcome students and the Students Union Government of Federal University of Technology, AKURE, Nigeria to Tekedia Institute CollegeBoost, a Tekedia Mini-MBA designed for college students. When students come together in this way for an academic excursion, you have a reason to believe. Yes, instead of the usual (parties, etc), they want to spend time with us at the Institute to co-learn and co-share towards advancing the continent.

These are brilliant young people in one of Africa’s finest technical universities. They are already well prepared by FUT AKURE; at the Institute, we will simply expand their horizons in market systems. Welcome.

Similarly, I also want to congratulate FUT Minna students who just finished a program in our Institute. I have checked the Board, and can see that our business sagacity is deepening. I just approved for the Advanced Diploma in Business Administration certificates to be released. I want to congratulate all of you and most especially the Students Union Government leadership for focusing on knowledge.

For more on Tekedia CollegeBoost, contact Eyitayo Adeleke.

(This piece has been updated with FUT Akure, not Minna, as the new team)

Responding to this post by Nurudeen Adeyemi, you always tag me (thanks), but here you did not state my position to help your audience. The average oil revenue during Jonathan was $76 billion per year , Buhari’s was $47 billion per year, using your data (I assume they did not include 2017 data). But if you look at borrowing, Buhari has made up his oil shortfalls via borrowing. My comment on that feed was this: money is money, borrowed or via oil revenue as when you spend Naira, it does not have a marker with “they got me from oil” or “I am borrowed”.

What Buhari did not get in oil, he had borrowed from pension, IMF, etc and at the end, he HAS more money (per year) than any of the administrations you mentioned. More so, the oil revenue that came during OBJ, Yar’Adua (the best among them), GEJ etc went into paying military era debts and because of that their budgets were LOWER.

Last Jonathan’s budget was N4.962 trillion in 2014 but Buhari’s last budget was 10.59 trillion naira in 2020. Even using absolute official rates in both 2014 and 2020, Buhari has more USD; Jonathan was around $24 billion using N200/$ in 2014 and Buhari $28 billion using N380/$ in 2020.

So, what you are sharing is irrelevant because even though oil revenue has dropped, President Buhari has used loans to jack up spending, more than any president in both Naira and USD. However, as I noted in the piece you cited, the thinking into the spending has not been strategic, and that is why it seems he does not have money even though he is spending more!

Comment on LinkedIn Feed

Comment: Even though President Buhari has used loans to jack up spending, more than any president in both Naira and USD, as you’ve said, he has projects to show for those spending but the previous administrations have no project to show for their spending that’s the issue.

Response: That is another debate which I do not want to follow up. I simply responded to debunk the “scarcity” you created on your feed. I am happy we are in affirmative now. You tagged me; so, I simply wanted to explain my side of the point. Mr. Buhari has a reason to be borrowing – he is fighting a war.  Yes, that he is spending more is understandable. I only responded to debunk that he had no money because oil revenue went down.

In a perfect internet market, the marginal cost of a digital product is zero. But no market is perfect, so, what we have in reality is that the marginal cost tends towards near-zero. What that means is that the transaction and distribution costs stay low even as output increases. Whenever you attain that positioning, your unit economics improves since you are essentially having accelerating returns which keep compounding.

Before you launch that digital product, understand this plot. If you do not, you will struggle to scale that product. The mastery of marginal cost is the mastery of digital business growth. Your scalable advantage is built on the “physics” bounded by distribution cost and transaction cost.

Unit Economics. Marginal Cost. Understand both, and the path to the mountaintop becomes clearer. How do you keep growing without increasing marginal cost?

https://youtu.be/P75hzh3e190